Revenue collection at the local level

In Ahmedabad, there are several bureaucratic and procedural reasons for poor revenue collection from rates (property tax). For example, despite having a fully computerized record, rates demand notices are hand-delivered by two-man teams of Ahmedabad Municipal Corporation clerks who used to handle about 15,000 properties each. However, a recent tribunal has ruled that each team should not be required to deal with more than 5,000 properties.

In addition, some 45,000 rates disputes await court rulings which take many years to settle. During this time, appellants need deposit only 75 per cent of the value of the rate with the courts. In 1991, 80 per cent of the value of arrears and 63 per cent of the value of current defaults, totalling Rs.2.4 billion, were subject to litigation. Non-residential and higher valued properties accounted for most of the amount. Because of the right to arbitration and the low risk and potential financial gain in doing so, recourse to litigation has virtually become "normal practice" for owners of industrial and commercial properties as well as rental housing. The situation could be improved only by amending the Bombay Provincial Municipal Corporations Act (1949).

Source: Batley, R., "Urban Management in India", mimeo, DAG, University of Birmingham, 1994.